Gov. Kay Ivey recently announced a $28 million suite of projects in Mobile and Baldwin counties that will be funded with Alabama’s share of royalties from offshore oil leases, but one state senator wants to make sure money generated from those leases in the future stays on the Gulf Coast as well.
The Gulf of Mexico Energy Security Act (GOMESA) established a program that splits a portion of federal oil royalties with Gulf states and their coastal municipalities. In Alabama, 80 percent of the nonfederal portion goes to the state government, while 20 percent is split between the two coastal counties.
The intent of the program was to help coastal communities mitigate the risks of offshore oil drilling, and there is perhaps no better example of those risks than the 2010 BP, Deepwater Horizon, oil spill. But Alabama’s handling of roughly $1 billion it received in a settlement after that spill has not sat well with many on the Gulf.
While coastal communities bore most of the environmental and economic burden from the oil spill, the Legislature ultimately voted to spend the lion’s share of its BP settlement paying down old debts and plugging a multi-million dollar funding gap in the state’s Medicaid program back in 2016.
Now, with the state set to receive more through the GOMESA program than ever, Sen. Chris Elliott, R-Fairhope, wants to make sure that doesn’t happen again. He has already pre-filed a bill for the 2020 legislative session that, if passed, would require state GOMESA funds to be spent in Mobile and Baldwin counties.
Speaking with Lagniappe, Elliott said he believes Ivey, her chief of staff, Joe Bonner, and Conservation Commissioner Chris Blankenship will keep the coast in mind when allocating GOMESA funds, but he also said there’s currently nothing on the books to stop future administrations from changing course.
“The state’s portion is not necessarily required to be spent in Mobile and Baldwin counties, and ultimately it’s the governor’s decision where that money goes,” Elliott said. “I’m confident that Ivey, [Blankenship] and [Bonner] will make sure that money continues to come to Coastal Alabama, but I was also sure that would happen with the BP money and that turned out not to be the case.”
Elliott said he hasn’t heard of any sustained effort to divert future GOMESA funding from the coast to other areas of the state, but that’s also why he wanted to move head with SB3 this year — hoping to get that bill or something similar through the legislature “before anybody really notices that money is there.”
The timing of the bill, Elliott said, is also important.
For years the revenue generated by GOMESA was relatively small, but as oil operations in the Gulf have moved to the east and closer toward Alabama’s coastline, proceeds from GOMESA have increased dramatically. In 2018 alone, Alabama and its two coastal counties received close to $30 million.
The current process for allocating the state’s GOMESA dollars runs through the Alabama Department of Conservation and Natural Resources (ADCNR) but stops at Ivey’s desk. Blankenship, who heads ADCNR, noted GOMESA has federal limitations on what type of projects it can fund.
Earlier this year, ADCNR began accepting project suggestions and then, over time, whittled those down to a recommendation for Ivey’s office. Blankenship said his staff considers a number of factors, including whether a project aligns with GOMESA’s intended purposes and whether it could also be implemented through other funding streams like the Restore Act, which was passed to address injuries from the 2010 BP spill.
“We look at what projects we feel have the most merit and then try and see whether they can be funded through any of the other Deepwater Horizon sources,” he said. “Some projects don’t fit well under funding sources. Boating and water access is one of those things that’s really easier under GOMESA.”
That seems to be evident looking at the 16 projects officially announced earlier this month, which include boating ramp construction and enhancements in Bayou La Batre, Dauphin Island, Gulf State Park and the Middleton Causeway. They also include more environmentally focused projects as well, like funding algal monitoring near Mobile Bay’s oyster beds and various other watershed enhancements.
A full list of Alabama’s GOMESA projects is available at lagniappemobile.com, but relative to Elliott’s proposed legislation, the most important thing about the selections are that none of them fall outside Mobile and Baldwin counties. Still, Elliott said his pre-filed bill was a way of “making darn sure” it stays that way.
Blankenship told Lagniappe he’s yet to read Elliott’s bill, but did note — even prior to this year — all of the projects the state has funded through GOMESA have been in Mobile and Baldwin counties.
“I don’t really see how that’s been an issue or where those funds have gone anywhere outside of those coastal areas,” Blankenship said. “Mobile and Baldwin counties also get their own share of GOMESA funds that do not come out of the state’s funding. It’s a separate allocation.”
Those separate allocations Blankenship is referring to are the dollars that go directly to the county commissions. Last year, Baldwin County saw $2.4 million and Mobile County received $2.8 million and those numbers are projected to stay around that same level through at least 2020.
The Mobile County Commission adopted a three-year plan for its GOMESA funds last year that includes, among other things, land acquisition and support for its recycling center.
Commissioner Charles “Skip” Gruber said Baldwin County’s dollars are directed toward environmental projects, and specifically mentioned dirt road paving efforts the county has undertaken in sensitive areas prone to erosion.
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